Sunday

TheInflationist Weekend Summary: 270609

Post a Comment June 28, 2009 – 1:34 am |   | Permalink |  Print This Post |

Our portfolio is now worth $90700 including all unrealised positions, taking our total return (in 6 months) to 126%. Cash in bank increased to just over $57229 after taking profits in our short NIFTY, intraday long Dax, and 5 cent dividend from BJT. The rest of our trading portfolio is looking better with markets pulling back (although some of our profits in ETFs and equities are being eroded). Most markets have found support at the 200 day MA support (Australia, Dow, FTSE, German Dax), with Asia trading one notch higher at the 30 day MA (India, China, Japan). We closed all our unhedged NIFTY positions this week, and since then the NIFTY has bounced to close at 4400 on Friday. We look to reshort NIFTY this coming week hopefully at 4500 level or after a big move up. The NIFTY went up >3% on Friday. Let’s hope for more large one-day rallies for us to reestablish our shorts.

With independence day and end of financial year coming, we expect a short term bounce this coming week, followed by a further decline which may or may not take out the recent low (Dow 8250). We still expect markets to rally higher and for the Dow to get closer to the 10000 mark. Market makers need more Dumb money to be reinvested into equities before they push markets lower to wipe the slate clean. There is a major transference of wealth in progress, and we hope to be on the receiving end.

Although we use technical analysis in our trading, we do NOT consider ourselves technical traders. It is convenient to use it to time our trades as it acts (in our opinion) like a self fulfilling prophecy.

Our order to short the Dow at 8550 remains open for now, with an upside of 8600 +/- 50 points. Our purchase of Troy resources is our way of riding the upcoming Gold rally. Gold is close to all time high, hence one should always be weary taking a long position on anything trading close to all time high - regardless of “fundamentals”! Those who bought into Crude Oil at $140 on the basis of “fundamentals” (ie shortage of supply, Hubert Peak Oil Theory etc) should learn from this. On the same note, shorting at all time lows should not be done to avoid major losses. Our play in Natural Gas hinges on this rule, and we will open more positions in Natural Gas ETF if Natural Gas goes to $2.50. Gas may not have bottomed yet, so we will hold back on loading up more. We expect a very cold winter in the northern hemisphere this coming December - as the media will make every excuse to push gas higher.

www.theinflationist.com

www.theinflationist.com

For those who are new to our site, we started TheInflationist Trading Challenge in January 2009 with $40000. Unlike any other stock trading website, we trade publicly LIVE, track our performance transparently, and make actual trades in our personal portfolio (yes, we own every stock and trading position in our portfolio). We stick our necks out on the public chopping board and feel actual pain when our positions are in the red (No, this is not virtual trading for us!)

This phenomenal 126% result is reproducible for all readers as trades are published live at prices available to readers. Applying our own fundamental and technical analyses with our conservative risk management strategies, combined with the views of some of our favourite investment analysts (Jim Rogers, Mr Magik, Tony Caldaro, Brian Shannon, Guy Lerner, Marc Faber and Philip Manduca), we formulate trading plans both short and long term. We do not rely on any one source, and not uncommonly trade contrarion to these technical experts (with all due respect).

Feel free to join us - the first website on the web where you can take a position in anything, long or short! Trading is as easy as writing an email.

1. Register

2. Go to “My Portfolio” (top column of links)

3. Add stocks (search for stock codes using Yahoo here) - for Australian stocks, add (.AX ie dot AX) as an extension (eg: BHP.AX for BHP; WPL.AX for Woodside); enter the purchase price and quantity.

4. For trading indices or commodities, simply click on “Add New” under the “Posts” section in your Author Dashboard (www.theinflationist.com/wp-admin).